Nielsen's 3Rs Offer Advertising Effectiveness Calculations

There’s no sense for advertisers to ever be fully satisfied with the effectiveness of their messaging and tactics. So, they’ll always be in search of more data and the finish line will
keep moving.

But here’s at least one enticing landing spot: a gauge of how many consumers saw an ad on one of four screens (TV, PC, tablet, smartphone) and what it prompted them to do
(or not) in real time -- with the data coming in an easily digestible form, ripe for swift action.

Randall Beard says Nielsen’s on that path with its “3R framework,” an
umbrella term for its efforts to measure how reach and resonance lead to reaction. (It could be called 4Rs with an equation where reach + resonance + reaction = revenue.)

Helping in the
kitchen are the 3Vs of Big Data, where there's more volume and variety of information coming at greater velocity.

“There’s way more data, way faster that’s coming at
advertisers and agencies,” said Beard, Nielsen’s global head of advertiser solutions. “And one of the big challenges is to have a simplified (platform) that brings it all together in
a way that they can easily operationalize it.”

Beard will lead a webinar next week with details on how Nielsen envisions opportunities in a 3R playing field. In advance, he took some
time to offer some thoughts:

--In the “reaction” area, the Nielsen Catalina Solutions services look to connect media consumption with purchase behavior. There are multiple research
providers looking in that direction with TV advertising. What makes the offering different?

“The audience data is from the Nielsen people meter data set -- supplemented by set-top-box
data,” he said. “Most of the other players in the space are just simply using set-top-box data … The second thing is that we’re cross-platform, so we have this service not
only with TV, but with online, with mobile, with print. So you can identify the most responsive buyer behavior group and then execute that across platforms.”

--If the same ad runs on
live TV and online, which is more effective?

The data is not for the exact same ad on both platforms, but 2011 research found the “breakthrough” -- percentage of consumers
remembering an ad -- for 15- and 30-second spots was about 50% higher in an online platform than TV. Hypotheses Beard offered include online platforms offering more of a lean-forward experience and
usually a lesser ad load.

--Nielsen, of course, doesn’t determine what the currency is in a particular market. But can any of its “reaction” tools – Nielsen Catalina,
Buyer Insights – offer the basis for one should advertisers want to trade on the data?

Beard indicated Nielsen believes it plays more of an advisory role, but there are opportunities for
sort of one-off deals.

“We’re trying to bring data to the advertisers, agencies and media companies that they can use to be smarter about the way people plan buy, execute and
ultimately optimize the advertising,” he said.

He said working with NBC, Nielsen has found the same ads in its Olympic programming have more “resonance” than when they run
elsewhere and NBC has used that to demonstrate effectiveness in a sales process.

--One argument networks make is there is value in ads viewed as they zip by in fast-forward mode via DVRs.
Logos might be seen or there may be some reinforcement if a viewer has seen the ad before in full. Has Nielsen developed any insight here through its research?

Not discretely. But it has found
that ad recall is 30% lower for time-shifted viewing -- whether an ad is skipped or not with a DVR -- versus live TV.

“If you know that there’s a difference there, you can
certainly assume that at least some part of a lower score in a DVR’d program is because of fast-forwarding,” Beard said. “How much? Couldn’t say.”

-- One coveted
metric in the “reaction” area would be: did an ad prompt a purchase the next day? (Helpful to consumer package goods and telecom marketers, among others.) Can a viewing-purchase link be
available in a sort of overnight fashion a la the cornerstone Nielsen TV ratings?

Not yet. It takes time to connect the dots.

But in a “resonance” sphere – both with
TV and digital ads – results come in much faster.

--But clearly the quicker the better – especially if there’s an emphasis on providing real-time insight to allow
adjustments.

That’s a “big opportunity,” Beard said, across all platforms. That would give an advertiser with, say, three ads running a chance to determine certain
effectiveness gauges for each and do some editing mid-flight.

That not only can improve “resonance,” but save money.

If a 15-second spot is doing just as well as a
30-second one, why stick with it?

“Why spend money on 30s,” Beard said. “Move all your spending to 15s … there’s lots of opportunities for advertisers, in
particular, to measure “reach” and “resonance” in as close to real-time as possible and then make smart choices about how they allocate their spending, or improve their
advertising to get a better reaction outcome.”

The article has been revised to reflect research on how ads performed online versus TV and when viewed via a DVR versus on live
TV, as well as Nielsen "resonance" data coming in faster than "reaction" information.